Car insurance rates are the base of premium calculations. If you get the low rates you will end up with low premiums. They are like charts of multipliers that used for each applicant. These multipliers may be different for each group of drivers. Each auto insurer has their own way of determining rates to be used. They get approved by state insurance commissioners but they have hardly anything to say about their level. Commissioners can stop unfair rate settings and discriminations but they cannot really tell a company to drop their rates.
Auto Insurance Rates vs. Discounts
Some companies rely heavily on rates to determine the premiums. They apply lower rates for low risks to differentiate the premiums. On the other hand, some companies may use similar rates for most people except certain high risk groups. However, they use discounts heavily. A company that regulates the premiums with rates will include their discounts within the rates. A company that relies heavily on discounts would calculate a base premium and start applying discounts to bring them down.
So, the company that advertises to offer certain discounts may not necessarily be cheaper at the end. Another company can beat their quotes easily since their base rates are already lower. They already cut their rates to reflect good driving history, no claims, safe cars and so on. In other words, it may be too early to assume that a company would be cheaper because of high discounts they offer. You will have to see the final quotes before you can make a comparison.
Why Would You Be Offered Cheaper Automobile Insurance Rates
Gender: There are many reasons why you would be getting the best rates from certain insurers. Gender is one of them. Ladies on average get better rates than male drivers. Based on long statistical studies many companies see female drivers to be lower risks and therefore being one would qualify you for cheaper auto insurance quotes.
Age: is another key consideration. Teenage drivers get the highest rates for several reasons. First of all they have hardly any driving experience. Secondly most of them, especially the male ones like to take chances with their driving. They like to see how fast their car can go, how it handles the curves on the road and they may not think much of driving while drunk or sending a text.
Things start evening out after the age of twenty five. From then onwards the rates applied may stay stable for some time until the age of seventy. Older drivers are another group that is considered high risk and high rates are applied to them as well.
Cars are another area on the rate chart. Depending on the car insured people get high or low quotes. Each automobile comes with own risk ratings. The higher the risk the higher the premium gets. Usually, cars that can withstand accidents, protect their driver and passengers better, has a low chance of being driven fast or turn over in sharp bends are considered safe and deserve good rates.
Zip code: is one of the key factors as well. The main division is between cities and sleepy towns in countryside. Big city drivers face with high car insurance rates because of the risks associated with living and driving in cities. Vehicle insurance costs can be as much as twice more in metropolitan areas.
Credit Score: Credit history of drivers is included in the premium calculations. Drivers with good credit standing are separated from the ones with bad credit. This could be considered within rates or certain percentage discounts applied depending on how good your driving history is.
Driving History: is the last but not the least important rate setting factor. Good drivers get charged much lower rates compared to the ones with claims and points on driving license. This could result in serious premiums difference at the end.